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November 26, 2018 at 12:27 PM
Regulators are sending “mixed signals” about crypto currency regulations, with the Securities and Exchange Commission’s crypto-exchange-traded product approval process being “very confusing,” according to SEC Commissioner Hester Peirce.
In a recent speech, the Republican commissioner stated that in coming to terms with crypto, regulators are not always coordinating, making the U.S. regulatory scheme for such products confusing.
For instance, the Commodity Futures Trading Commission has given the thumbs up to crypto-derivatives markets, “but the SEC so far has not approved any application to list an exchange-traded product based on cryptocurrencies or crypto-derivatives trade on U.S. exchanges,” Peirce stated.
The fact that decisions about crypto ETFs “are generally made in the first instance at the staff-level through delegated authority from the Commission is very confusing,” Peirce said.
(Related: SEC Ruling Against Southridge CCO Could Have Chilling Effect)
The agency’s five commissioners “have the final say on enforcement and regulatory decisions by the Commission, but because our jurisdiction is quite large, we allow the staff to make certain routine decisions on our behalf,” Peirce explained.
“Once the staff publishes its decision, if one of the Commissioners or the affected party does not like the decision, it can be reviewed by the Commission,” she said.
The SEC’s recent decision to suspend trading for 10 days in two foreign exchange-listed crypto-based products that were being traded in the United States over-the-counter markets “also confused investors,” Peirce opined.
The securities regulator “was concerned that there was confusion about just what the products were because they were not being described consistently. Unfortunately, we too confused investors.”
